Blockaded Palestinians in the Gaza Strip Turn to Bitcoin Amid Financial Chaos (Report)

Numerous Palestinians in the blockaded enclave of Gaza have lost their lives due to the Israeli-Palestinian conflict, while others are on the edge of survival.

The total destruction of the area has also negatively affected the local financial network. Trying to preserve their wealth and monetary independence from Israel, an increasing number of Gazans have turned to bitcoin and other digital currencies.

The Israeli-Palestinian War

The clash between the two nations, which started last century, is one of the most enduring global conflicts. The core of the problem is the fact that Israel’s territory is home to both Jews (the predominant population) and Palestinian Arabs. The two groups have claimed the same land, but a compromise has not yet been found.

The first tension occurred at the beginning of the 20th century when many Jews, fleeing persecution in Europe, settled in the region and wanted to establish a national homeland. The local Arab population resisted, claiming the land was rightfully theirs.

The United Nations got involved to prevent what seemed like the start of a major military conflict. The organization created a Partition Plan for Palestine that could split the land into two independent Arab and Jewish states, while Jerusalem would have a Special International Regime. The plan never saw the light of day, provoking the 1947-1949 Palestine War.

Violence continued to reign in the area (rich in historical, religious, and cultural sites) in the following decades. Most Israelis support the possible creation of two separate states, while the majority of Palestinians reject such an option. The latter believe the entire territory belongs to them and have carried out multiple armed attacks against Israelis over the years. The Islamic extremist terrorist organization – Hamas – was responsible for most of the assaults.

The Gaza Strip

Regardless of who is right, thousands of people lost their lives due to the war, and a huge chunk of the land has been ravaged. One of the most heavily affected areas was the Gaza Strip (a Palestinian enclave on the eastern coast of the Mediterranean Sea), where the situation is unbearable for many.

The region is one of the most densely populated places on Earth and is inhabited by over two million people. Israel has imposed a blockade on it since 2007, meaning the residents must rely on humanitarian assistance to survive.

Only 5% of the population has access to clean water, while 60% of the children suffer from stunted growth due to malnutrition.

Most young people are unemployed, and the domestic economy is totally crippled. It seems logical that locals would seek alternatives to preserve and generate some wealth amid the chaos, and here comes crypto.

Bitcoin: A Lifeboat for the Deprived Ones

The National News interviewed some residents of the Gaza Strip and discovered that many have turned to the world of crypto lately.

One of the participants, Noor, said her lifestyle completely changed once she started learning about digital currencies.

“My fortunes changed when I learned to invest in bitcoin and started selling make-up online,” she said.

Dr. Tariq Dana – a policy adviser for Al-Shabaka, the Palestinian Policy Network – thinks an increasing number of locals have hopped on the crypto bandwagon because this is one way to gain independence from Israel’s financial regulations.

“I believe the decentralized bank status of crypto is encouraging enough for us [Palestinians] to have an income through a safe and freelance platform,” said Kareem – a resident of Gaza who also invests in bitcoin.

Despite granting them monetary freedom and a chance to be part of the global financial network, crypto hides its risks due to its notorious volatility. Bitcoin’s price has dropped over 75% in the past 12 months, causing significant paper losses to HODLers. Speaking on the matter was Haitham Zuhair – a Palestinian businessman and a crypto investor:

“I am certain the drop in Bitcoin price has cost many traders in Gaza so much because their initial investments and capital are not as high as one would think.

Education and experience are essential to persist with crypto as a space of online income and a symbolic tool of economic steadfastness in Palestine. It only takes one wrong call to lose an earth-worth profit in crypto.”

Crypto trader Mohammed Awni revealed his bitcoin investment during the bull run was so successful that he had enough funds to get married. The bear market, though, has crushed his dream (at least for now).

Hamas Also Finds Crypto Attractive

Apart from the numerous peaceful locals who struggle to meet both ends, crypto has also grabbed the attention of the terrorist organization Hamas.

Israel’s authorities seized last summer 84 cryptocurrency wallets that allegedly received over $7.7 million in digital assets, and some belonged to the Islamic group. Per the confiscation, it became clear that Hamas employed multiple coins, such as Tether (USDT), Bitcoin (BTC), Tron (TRX), Ether (ETH), and Dogecoin (DOGE).

The Defense Ministry of Israel carried out another seizure in March this year, confiscating 30 digital wallets linked to the exchange company al-Mutahadun. The authorities claimed the platform “assists the Hamas terror group, and especially its military wing, by transferring funds amounting to tens of millions of dollars a year.”